Composite Index continues to burden school funding
by Larry S. Chowning
“A double-edged sword!”
That’s how Middlesex County School Board chair Garland Harrow referred to the beautiful shorelines of the Piankatank and Rappahannock rivers at Monday night’s board meeting.
Once again the issue is the State Composite Index (SCI), a formula used to determine the ability of a county to pay for its own school system.
On the positive side of the sword are the high real estate values that bring in taxes for the county; but on the negative side is the loss of $2 million in state aid to county schools from 2006 to 2014 due to the county’s high SCI.
Part of the reason Middlesex’s SCI has remained high is that when real estate values went down during the recent recession it was not reflected in the state formula. Middlesex County was holds real estate reassessments every four years. During those years, values were dropping, but by not having more frequent reassessments the county’s SCI was being figured on higher values based on previous years.
“When land values stay pretty much the same, it doesn’t make much difference when you have a reassessment,” said county administrator Matt Walker. “But when land values fluctuate, county-wide reassessments need to be done sooner than later.”
To conduct a reassessment costs about $100,000.
Middlesex County’s last reassessment was in 2011 and it did result in lower land values, but those values are not figured into the 2014-16 SCI formula, said Walker. This is because the 2011 reassessment values did not go into effect and were not finalized until 2012—too late to be figured into the 2014-16 SCI. In Middlesex’s case, the state is still using higher real estate values from the 2007 reassessment.
“We need to review this when we reassess, so it doesn’t fall again right before a biennium composite index,” said Walker. “It is in our best interest to have the most accurate up-to-date data.”
For the next two years, Middlesex’s new SCI has the county ranked 10th statewide in wealth (ability to pay). The county was 13th in the last biennium. The new 2014-16 SCI for Middlesex will be .7445, which is up from the 2012-2014 rate of .7232. The .7445 CPI means Middlesex is expected to pay 74.45% of its educational costs.
According to Walker, in figuring Middlesex’s SCI the state used the 2007 value of about $2.6 billion as the true value of property and of public service corporation properties. The true value of the 2011 reassessment was about $2.3 billion.
A county’s total adjusted gross income and taxable retail sales are two other factors used by the state to figure the SCI. The state used the value of $240,804,749 as the county’s total adjusted gross income, and taxable retail sales of $78,010.471. The total adjusted gross income has increased $14,239,854 over the last biennium, Walker noted.
For the next two fiscal years, the higher SCI will cost Middlesex taxpayers about $100,000 in lost state revenue for the schools, said school superintendent Dr. Thomas Taylor at Monday’s school board meeting.
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